This clinical trial is designed to evaluate the safety, antiviral and anti-tumor necrosis factor (TNF) activity, and preliminary efficacy of two dose levels of thalidomide in reducing weight loss in patients with HIV wasting syndrome. Thalidomide was originally developed as a sleeping pill. It is now in investigational use in the USA for several dermatological conditions, transplantation, and leprosy. Currently, another investigational trial is ongoing at this institution in patients with infections due to mycobacteria and/or HIV. Preliminary data gathered in the ongoing study suggest a reversal of wasting in our patients. Serum TNF and TNF production by peripheral blood monocytes are elevated in AIDS and may be responsible for toxicity, fever and wasting. Elevated circulating TNF is also found in children with AIDS and progressive encephalopathy. AIDS patients also commonly experience severe and prolonged infection with mycobacteria, which may result in additional TNF production. While producing undesirable symptoms, TNF may also play a role in the control of viral infection. However, for HIV, most data point to TNF augmenting viral replication. TNF enhancement of viral infection would be likely to lead to the progression of immunodeficiency. We suggest that modulating TNF in HIV infection would be beneficial in controlling HIV replication, in modifying toxic symptoms of HIV that are TNF-mediated, and in limiting progression of immunodeficiency related to HIV replication.